Market Overview

Century Bancorp, Inc. Announces Increased Earnings for Q2 2016, up 5.3%; Asset Growth to Record Size of $4.2 BB; Regular Dividend Declared

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MEDFORD, Mass.--(BUSINESS WIRE)--

Century Bancorp, Inc. (NASDAQ: CNBKA) (www.centurybank.com) ("the Company") today announced net income of $11,549,000 for the six months ended June 30, 2016, or $2.07 per Class A share diluted, an increase of 6.1% compared to net income of $10,884,000, or $1.95 per Class A share diluted, for the same period a year ago. Total assets increased 6.2% from $3.9 billion at December 31, 2015 to $4.2 billion at June 30, 2016. For the quarter ended June 30, 2016, net income totaled $6,241,000 or $1.12 per Class A share diluted, an increase of 5.3% compared to net income of $5,925,000, or $1.06 per Class A share diluted, for the same period a year ago.

Net interest income totaled $36.1 million for the six months ended June 30, 2016 compared to $34.1 million for the same period in 2015. The 5.8% increase in net interest income for the period is primarily due to an increase in average earning assets. The net interest margin was stable at 2.16% on a fully taxable equivalent basis for the first six months of 2016 compared to the same period in 2015. This was primarily the result of relatively stable earning asset yields and rates paid on interest-bearing liabilities. The average balances of earning assets increased by 7.2% combined with a similar increase in average deposits. Also, interest expense increased 12.1% as a result of an increase in deposit balances.

The provision for loan losses increased by $600,000 from $200,000 for the six months ended June 30, 2015 to $800,000 for the same period in 2016, primarily as a result of an increase in loan balances. The Company's effective tax rate decreased from 4.0% in 2015 to 0.7% in 2016 primarily as a result of an increase in tax-exempt income.

At June 30, 2016, total equity was $227.2 million compared to $214.5 million at December 31, 2015. The Company's equity increased primarily as a result of earnings and a decrease in other comprehensive loss, net of taxes, offset somewhat by dividends paid. Other comprehensive loss, net of taxes, decreased primarily as a result of a decrease in unrealized losses on securities transferred from available-for-sale to held-to-maturity and amortization of the pension liability. This was offset, somewhat, by an increase in unrealized losses on securities available-for-sale.

The Company's leverage ratio stood at 6.63% at June 30, 2016, compared to 6.79% at December 31, 2015. The decrease in the leverage ratio was due to an increase in quarterly average assets, offset somewhat by an increase in stockholders' equity. Book value as of June 30, 2016 was $40.80 per share compared to $38.53 at December 31, 2015.

The Company's allowance for loan losses was $23.9 million or 1.32% of loans outstanding at June 30, 2016, compared to $23.1 million or 1.33% of loans outstanding at December 31, 2015 and $22.2 million or 1.44% of loans outstanding at June 30, 2015. The change in the ratio of the allowance for loan losses to loans outstanding, when compared to June 30, 2015, was primarily due to changes in portfolio composition. Non-performing assets totaled $1.5 million at June 30, 2016, compared to $2.3 million at December 31, 2015 and $4.1 million at June 30, 2015.

The Company's Board of Directors voted a regular quarterly dividend of 12.00 cents ($0.12) per share on the Company's Class A common stock, and 6.00 cents ($0.06) per share on the Company's Class B common stock. The dividends were declared payable August 15, 2016 to stockholders of record on August 1, 2016.

The Company, through its subsidiary bank, Century Bank and Trust Company, a state chartered full service commercial bank, operating twenty-seven full-service branches in the Greater Boston area, offers a full range of Business, Personal and Institutional Services.

Century Bank and Trust Company is a member of the FDIC and is an Equal Housing Lender.

This press release contains certain "forward-looking statements" with respect to the financial condition, results of operations and business of the Company. Actual results may differ from those contemplated by these statements. The Company wishes to caution readers not to place undue reliance on any forward-looking statements. The Company disclaims any intent or obligation to update publicly any such forward-looking statements, whether in response to new information, future events or otherwise.

 
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Condition (unaudited)
(in thousands)
      June 30,     December 31,

Assets

2016 2015
Cash and Due From Banks $ 66,913 $ 52,877
Federal Funds Sold and Interest-bearing Deposits In Other Banks 20,093 167,847
 
Short-term Investments 3,241 3,233
 
Securities Available-for-Sale (AFS) 562,933 404,623
 
Securities Held-to-Maturity 1,573,829 1,438,903
 
Federal Home Loan Bank of Boston stock, at cost 26,086 28,807
 
Loans Held-for-Sale 12,403 -
 
Loans:
Commercial & Industrial 493,033 452,235
Municipal 134,386 85,685
Construction & Land Development 31,178 27,421
Commercial Real Estate 728,658 721,506
Residential Real Estate 219,494 255,346
Consumer and Other 11,339 11,323
Home Equity   183,816   178,020
 
Total Loans 1,801,904 1,731,536
Less: Allowance for Loan Losses   23,863   23,075
 
Net Loans 1,778,041 1,708,461
 
Bank Premises and Equipment, net 23,525 24,106
Accrued Interest Receivable 8,714 8,002
Goodwill 2,714 2,714
Other Assets   111,820   107,868
 
Total Assets $ 4,190,312 $ 3,947,441
 

Liabilities

Demand Deposits $ 610,756 $ 541,955
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,272,221 1,070,585
Money Market Accounts 875,428 989,094
Time Deposits   460,527   473,426
 
Total Interest Bearing Deposits   2,608,176   2,533,105
 
Total Deposits 3,218,932 3,075,060
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 217,765 197,850
Other Borrowed Funds   431,000   368,000
 
Total Borrowed Funds 648,765 565,850
 
Other Liabilities 59,346 55,904
Subordinated Debentures   36,083   36,083
 
Total Liabilities 3,963,126 3,732,897
 
Total Stockholders' Equity   227,186   214,544
 
Total Liabilities & Stockholders' Equity $ 4,190,312 $ 3,947,441
 
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Comparative Statements of Income (unaudited)
For the Quarter and Six months ended June 30, 2016 and 2015
(in thousands)
           
Quarter ended June 30, Six months ended June 30,
2016   2015 2016   2015
 
Interest Income:
Loans $ 14,162 $ 12,470 $ 28,335 $ 24,546
Securities Held-to-Maturity 8,128 9,371 15,940 17,539
Securities Available-for-Sale 1,144 737 2,107 1,469
Federal Funds Sold and Interest-bearing Deposits In Other Banks   308   97   623   293
 
Total Interest Income 23,742 22,675 47,005 43,847
 
Interest Expense:
Savings and NOW Deposits 938 692 1,776 1,320
Money Market Accounts 781 734 1,576 1,516
Time Deposits 1,394 1,207 2,752 2,363
Securities Sold Under Agreements to Repurchase 126 128 241 242
Other Borrowed Funds and Subordinated Debentures   2,247   2,200   4,554   4,285
 
Total Interest Expense   5,486   4,961   10,899   9,726
 
Net Interest Income 18,256 17,714 36,106 34,121
 
Provision For Loan Losses   350   -   800   200
 
Net Interest Income After
Provision for Loan Losses 17,906 17,714 35,306 33,921
 
Other Operating Income
Service Charges on Deposit Accounts 1,962 1,934 3,899 3,847
Lockbox Fees 883 888 1,672 1,676
Net Gain on Sales of Loans 798 418 798 517
Other Income   1,000   970   1,928   1,675
 
Total Other Operating Income 4,643 4,210 8,297 7,715
 
Operating Expenses
Salaries and Employee Benefits 10,040 9,480 19,816 18,614
Occupancy 1,551 1,517 3,130 3,122
Equipment 679 659 1,315 1,252
FDIC Assessment 592 545 1,160 1,048
Other   3,426   3,565   6,549   6,268
 
Total Operating Expenses   16,288   15,766   31,970   30,304
 
Income Before Income Taxes 6,261 6,158 11,633 11,332
 
Income Tax (Benefit) Expense   20   233   84   448
 
Net Income $ 6,241 $ 5,925 $ 11,549 $ 10,884
 
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Year-to-Date Average Comparative Statements of Condition (unaudited)
(in thousands)
      June 30,     June 30,

Assets

2016 2015
Cash and Due From Banks $ 69,805 $ 69,139
Federal Funds Sold and Interest-Bearing Deposits in Other Banks 242,004 221,727
 
Securities Available-For-Sale (AFS) 443,409 464,679
Securities Held-to-Maturity (HTM) 1,477,252 1,637,599
 
Total Loans 1,789,952 1,363,532
Less: Allowance for Loan Losses   23,524     22,482  
 
Net Loans 1,766,428 1,341,050
 
Unrealized (Loss)Gain on Securities AFS and HTM Transfers (10,324 ) (15,774 )
Bank Premises and Equipment 23,892 24,312
Accrued Interest Receivable 8,124 7,262
Goodwill 2,714 2,714
Other Assets   111,848     99,258  
 
Total Assets $ 4,135,152   $ 3,851,966  
 

Liabilities

Demand Deposits $ 573,303 $ 500,241
 
Interest Bearing Deposits:
Savings and NOW Deposits 1,258,231 1,142,838
Money Market Accounts 983,562 973,696
Time Deposits   448,890     383,832  
Total Interest Bearing Deposits   2,690,683     2,500,366  
 
Total Deposits 3,263,986 3,000,607
 
Borrowed Funds:
Securities Sold Under Agreements to Repurchase 227,888 256,883
Other Borrowed Funds   329,731     309,601  
 
Total Borrowed Funds 557,619 566,484
 
Other Liabilities 56,817 50,804
Subordinated Debentures   36,083     36,083  
 
Total Liabilities 3,914,505 3,653,978
 
Total Stockholders' Equity   220,647     197,988  
 
Total Liabilities & Stockholders' Equity $ 4,135,152   $ 3,851,966  
 
Total Average Earning Assets - QTD $ 4,023,022   $ 3,738,382  
 
Total Average Earning Assets - YTD $ 3,952,617   $ 3,687,537  
 
 
Century Bancorp, Inc. and Subsidiaries
Consolidated Selected Key Financial Information (unaudited)
(in thousands, except share data)     June 30,   June 30,
2016 2015

Performance Measures:

 
Earnings per average Class A share, diluted, quarter $ 1.12 $ 1.06
Earnings per average Class A share, diluted, year-to-date $ 2.07 $ 1.95
Return on average assets, year-to-date 0.56 % 0.57 %
Return on average stockholders' equity, year-to-date 10.53 % 11.09 %
Net interest margin (taxable equivalent), quarter 2.15 % 2.19 %
Net interest margin (taxable equivalent), year-to-date 2.16 % 2.16 %
Efficiency ratio, year-to-date - Non-GAAP (1) 62.9 % 64.3 %
Book value per share $ 40.80 $ 36.71
Tangible book value per share - Non-GAAP (1) $ 40.32 $ 36.22
Capital / assets 5.42 % 5.22 %
Tangible capital / tangible assets - Non-GAAP (1) 5.36 % 5.16 %
 
 
Common Share Data:
Average Class A shares outstanding, diluted, quarter & year-to-date 5,567,909 5,567,909
 
Shares outstanding Class A 3,600,729 3,600,729
Shares outstanding Class B   1,967,180     1,967,180  
Total shares outstanding at period end   5,567,909     5,567,909  
 
 

Asset Quality and Other Data:

 
Allowance for loan losses / loans 1.32 % 1.44 %
Nonaccrual loans $ 1,486 $ 2,186
Nonperforming assets $ 1,486 $ 4,101
Loans 90 days past due and still accruing $ - $ -
Accruing troubled debt restructures $ 4,146 $ 3,024
Net (recoveries)charge-offs, year-to-date $ (72 ) $ 274
 
Leverage ratio 6.63 %

*

6.58

%

*

Common equity tier 1 risk weighted capital ratio 10.59 % * 10.24

%

*

Tier 1 risk weighted capital ratio 12.11 % * 11.85

%

*

Total risk weighted capital ratio 13.14 % * 12.87

%

*

Total risk weighted assets $ 2,304,563 * $ 2,174,045

 

*

 
* computed utilizing recently implemented Basel III regulatory capital framework.
 
(1) Non-GAAP Financial Measures are reconciled in the following tables:  
 
Calculation of Efficiency ratio:
 
Total operating expenses(numerator) $ 31,970   $ 30,304  
 
Net interest income $ 36,106 $ 34,121
Total other operating income 8,297 7,715
Tax equivalent adjustment   6,387     5,288  
Total income(denominator) $ 50,790   $ 47,124  
 
Efficiency ratio, year - Non-GAAP       62.9 %       64.3 %
 
Calculation of tangible book value per share:
 
Total stockholders' equity $ 227,186 $ 204,373
Less: goodwill   2,714     2,714  
Tangible stockholders' equity(numerator) $ 224,472   $ 201,659  
 
Total shares outstanding at period end(denominator) 5,567,909 5,567,909
 
Tangible book value per share - Non-GAAP     $ 40.32       $ 36.22  
Book value per share - GAAP     $ 40.80       $ 36.71  
 
Calculation of tangible capital / tangible assets:
 
Total stockholders' equity $ 227,186 $ 204,373
Less: goodwill   2,714     2,714  
Tangible stockholders' equity(numerator) $ 224,472   $ 201,659  
 
Total assets $ 4,190,312 $ 3,913,818
Less: goodwill   2,714     2,714  
Tangible assets(denominator) $ 4,187,598   $ 3,911,104  
 
Tangible capital / tangible assets - Non-GAAP       5.36 %       5.16 %
Capital / assets - GAAP         5.42 %       5.22 %
 

Century Bancorp, Inc.
William P. Hornby, 781-393-4630
CPA
whornby@centurybank.com
Fax: 781-393-4071



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